Lagarde indicted for fraud !!!!!!!!!!!!!!!!!!

The head of the International Monetary Fund, Christine Lagarde, was placed under formal investigation by French magistrates on Wednesday for her alleged role in a long-running political fraud case, a source close to the former French finance minister said.

The source said Lagarde, who was earlier questioned by magistrates in Paris under her existing status as a witness, believed the decision to investigate her for alleged negligence was unfounded and would appeal against it. A French judiciary source also confirmed the step. In French law, magistrates place someone under formal investigation when they believe there are indications of wrongdoing, but that does not always lead to a trial.

The inquiry into the tycoon Bernard Tapie has embroiled several of former president Nicolas Sarkozy's cabinet members, including Lagarde. Tapie, who supported Sarkozy in the last two elections, was awarded €403m in a 2008 arbitration payment under Sarkozy's presidency to settle a dispute with the now defunct, state-owned bank Credit Lyonnais over a 1993 share sale. Lagarde was finance minister at the time.

The latest monthly index of purchasing managers (PMI), from data firm Markit, found that France's economy continues to struggle. French manufacturing activity is falling at its fastest rate in 15 months. Growth in the country's service sector picked up, but the overall French private sector is flatlining after shrinking for the past three months. The composite PMI for the eurozone fell to a two-month low of 52.8 this month, down from 53.8 in July. Factory output weakened, with the eurozone manufacturing PMI falling to a 13-month low of 50.8, closer to the 50-point mark that separates expansion from contraction. Firms also reported that job creation had slowed to near-stagnation in August, suggesting that progress in cutting eurozone unemployment is stalling. "The ongoing subdued and fragile nature of the upturn in economic activity also remains too weak to encourage companies to take on staff in sufficiently large numbers to have a meaningful impact on unemployment," Markit said, warning that economic and geopolitical uncertainties are also deterring firms from hiring.Merkel is far more responsible than perhaps some others because she has ruled European economic policy by diktat. She has forced all of Europe to adhere to ideological Neoliberalism. Her policy of moralizing and condescension toward the people of Europe have caused more economic suffering than even the Great Depression created. The overwhelming failure of Neoliberal economic policy especially as practiced by Merkel has devastated millions of lives. These failures are not just for today but will continue to create gratuitous suffering and the rapid flow of wealth too the very top for decades to come. The rulers of today are ideologues who are making policy based of their own views and philosophy of Neoliberalism any sort of evidence has nothing to do with policy just - make the rich richer and everyone else, well get accustomed to life as we see it in Bangladesh (Neoliberal paradise) today.

"A sharp decline in the outlook for France’s industry suggested that the country will yet again see zero growth this quarter. 

Purchasing managers’ index (PMI) data for the manufacturing sector came in much weaker than analysts had expected this August.

Falling 1.3 points to 46.5, the figure remains well below 50, signalling that output in manufacturing is falling, according to Markit data published on Thursday."  The overall French PMI, including a “modest expansion” in the country’s dominant services sector, “masked the ongoing weakness in manufacturing”, said Jack Kennedy, senior economist at Markit.  Back in January I said France was in deep trouble and would be exposed during the second half of the year.
They have massaged the results to avoid declaring reentry into recession but that is where they are and it is getting worse.
They continue to allow the public sector to dominate GDP accounting for some 57% of activity. That is a disaster which they can't change, because of the vested interest the public sector (unions) holds in continued suicidal levels of economic consumption.
Place your bets on the next quarter being described by INSEE as 'holding steady', I imagine this is a French euphemism for stagnant.

As I said in the March-April period there was a pumping of EZ figures - accrue receivables, defer payables - for the MEP elections. Like all accrual, reversals soon come swanning in and this has happened and for France in a 'tout le monde en vacances' excuse period. Thus I think the numbers are actually a little worse than they say. We will see in September and I think that second-half 0.5% growth figure is more like 0.3%.
The only think France has going for it is the Ukraine ulcer will not have as much effect on her as Germany, Baltics and Balkans.... I take it we are meant to be surprised at this news. I'm willing to bet that the French have fiddled the figures and that the country is actually in recession. Ah what a wonderful thing the euro was, I wonder how long it will be before the populas start clamouring to have the franc back....Well...The people already are, it is the elite that won't entertain the idea. Worth remembering Madame Guillotine can be very persuasive.

The ZEW indicator of economic sentiment plunged more sharply than expected to a 20-month low of 8.6 points from 27.1 points in July. Economists polled by Reuters had forecast a far smaller fall, to 18.2 points. The index, which measures investors' expectations for the economy in six months' time, has fallen for eight consecutive months. Heightened geopolitical tensions are raising fears that the eurozone's weak recovery will be snuffed out altogether, and that Germany's economy will flatline.

As Russia's biggest trading partner in the EU, Germany is expected to be one of the economies hardest hit by Vladimir Putin's dispute with the west over his treatment of Ukraine, which has triggered sanctions and countersanctions.

"Fear is back," said Carsten Brzeski, an economist at ING. "The German ZEW just sent more signs of caution, showing that at least financial market participants are increasingly becoming pessimistic." The authors of the report said the decline in economic sentiment was the result of the geopolitical tensions that have begun to weigh on Germany's growth.

"In particular, current figures on industrial production and incoming orders suggest markedly reduced investment activities on the part of German firms against the backdrop of uncertain sales prospects. Since the economy in the eurozone is not gaining momentum either, the signs are that economic growth in Germany will be weaker in 2014 than expected." The extent of Germany's woes will be laid bare on Thursday, when the first official estimate of second-quarter GDP is expected to show zero growth, following 0.8% growth in the first quarter. Growth in the eurozone is also expected to slow to 0.1% between April and June, from 0.2% in the first three months of the year.

It was confirmed this Russian and EU (4th. Reich) cosmic crap did not manage to put both satellites on correct orbits. Russian hardware is shit, it's not a theory - it's confirmed fact. At no time there were not so many Russian cosmic failures.

As much as I admire Germany and its impressive manufacturing industry, the almost total reliance on exports as a way to achieve growth means that Germany cannot be the engine of growth that the Eurozone needs it to be.  The economic policies of China and Germany were just as much responsible for the financial crash as those of the debtor nations who have to exist for the policies of those two countries to work. German and Chinese surpluses were never returned and spent in their domestic markets but were recycled in the debtor states so that they could continue to buy German and Chinese goods to support the export growth that these two countries are so reliant on, of course this Ponzi scheme could not continue indefinitely hence the crash. Much of Europe is still in denial about some of the causes of the financial crash so it is hardly surprising that they cannot find a cure if they misdiagnose the illness. Anglo-saxon style casino banking was a convenient scapegoat which allowed others just as culpable to get away scot free. It explains the constant attacks on the city of London while ignoring their own zombie banks which are loaded up with sovereign debt which may turn out to be worthless. How many stress tests have they conducted on banks which have turned out to be nothing but meaningless shams that convinced no one.

It is worth remembering that at the introduction of the Euro the most vocal critics were British and what they predicted then subsequently happened. There is a lot to admire about Germany but do not have all the answers...

Germany's de facto leadership of the EU has been terrible. Most especially on the economic front. Certainly Germany itself benefitted from the hard currency policy it imposed on the other eurozone countries, as the industries of those countries folded one by one and their markets were taken over by German ones. But it was a disaster for the rest of us, and ultimately even Germany will be hurt as we become more and more unable to buy its goods. The only way soft-currency countries could have continued to compete with hard-currency ones like Germany was if the latter had allowed some domestic wage inflation. But they didn't, instead asking troubled countries to impose wage deflation - which they well knew was impossible, because wages are determined by contract and cannot be lowered easily any more than pensions.

For soft-currency countries, and even medium-hard currency ones like France, the euro has been a trap. You can't leave it without creating devaluation fears which will drive interest rates into the stratosphere, and if you stay in it your industry erodes year by year until you become a third-world vassal of Germany. The teutonic refusal to restore the competitivity of its southern neighbors by increasing its own wages has been selfish and destructive.

The new German assertiveness in foreign policy matters hasn't been much better. Merkel's dominant and belligerent stance during the Crimea crisis did more harm than good and is one reason why Russia and the EU are hardly talking any more, let alone working together to defuse the Ukrainian crisis. In any case if Germany wants to continue to call the foreign policy shots for all of Europe, it might start by doing its share of defense spending instead of relying on the French/British security umbrella.

Power comes with responsibility and Germany under Merkel hasn't shown much of it.

Merkel has resisted Stiglitz's calls for a Keynesian spur to recovery, including pooling debts in commonly-issued "Eurobonds" to allow members of the currency to borrow money at lower interest rates. Stiglitz should stick to his side of the pond. I'm sure that's Merkel's opinion of him, for it was the ability to borrow at low rates that was one cause of the euro crisis in the first place. Nations like Italy, France and (famously) Greece just went on a binge with all that cheap money they raised. Merkel hardly wants to give them a chance to do it all over again.

Having recently returned from Italy I can confirm Merkel's view of the Italians - they are living as if there was no recession. While many Italians are being forced to sell their second homes in the south they are still spending like there's no tomorrow.

Germany's persistent trade surplus with other EU countries is also blamed for undermining the recovery among the other 17 members, which import German goods but struggle to sell inside the EU's largest economy. This is a fairly constant refrain from The Guardian. Why blame the Germans for being successful? I think if Britain had a trade surplus with the rest of Europe neither the CBI nor Cameron would care tuppence about other countries whinging nor entertain the idea for one second of cutting back. A free market means a free market. So what exactly is the criticism meant to lead to? A controlled market where German artificially restricts its goods and buys in rubbish from her neighbours? Sounds like the old Soviet system to me. Merkel told Stiglitz and other Nobel laureates that monetary union needed to be married to fiscal union, which would provide the confidence and discipline for stained growth.

Inman of course means 'sustained'. Nevertheless this is the trap (if your a Eurosceptic) that Cameron is walking into. He thinks Merkel is an ally in 'finishing' the free market. Yes, she is, so long as there is in place greater fiscal union - harmonisation - to resurrect and old bug word from the nineties. That is the trade off Merkel is looking for from Cameron. Greater integration in return for market reforms. Something Cameron will pretend isn't on the agenda. And market reforms mean even more German goods being sold to her neighbours - including Britain. That means more household goods and more cars, and more machine tools. Just as Germany used the financial crisis to establish herself as second only to China in exports as the world recovered, so Germany will use a reformed market to cement her dominance in Europe.

Cameron can boast all he likes about the City of London, but the financial sector is no great mass employer and raiser of living standards. It is a select and narrow club of rich folk determined to make themselves richer....I find Merkel a particularly annoying personality. Overweening arrogance combined with base political cowardice (she is a former STASI officer hwo worked under Putin in East Germany). France and Italy have found the answer which is to run up their deficits to offset the huge surplus Germany is running. I think a subplot is also the emerging split on how to treat Russia. Clearly an even better way to deal with Germany is for France and Italy to develop their own relations with Russia independent from the EU dominated by Germany, Britain and the U.S.